PREIT Closes on Sale of Paxton Towne Centre

Mon Jan 14, 2013 10:54am EST

* Reuters is not responsible for the content in this press release.

http://pdf.reuters.com/htmlnews/8knews.asp?i=43059c3bf0e37541&u=urn:newsml:reuters.com:20130114:nBw145503a

Sale of Paxton Towne Centre resulted in net proceeds of $24.9 million

PREIT secures non-refundable deposit towards sale of Christiana Center
PHILADELPHIA--(Business Wire)--
Pennsylvania Real Estate Investment Trust (PREIT/NYSE: PEI) has completed the
previously announced sale of Paxton Towne Centre, a power center in Harrisburg,
Pennsylvania, for $76.8 million, representing a gain on sale of approximately
$33.6 million. The sale marks another key step in PREIT executing its business
plan. 

PREIT developed Paxton Towne Centre in 2001 for approximately $55 million and
the property had a book value of $57.9 million as of September 30, 2012. The
717,000 square foot property is anchored by Target, Costco, Kohl`s, and Weis
Markets. Other key retailers at the property include H.H. Gregg, Michael`s,
Books-A-Million, Babies"R"Us and Bed, Bath and Beyond. The property secured a
mortgage loan with an outstanding balance of $50.0 million. In connection with
the transaction, the Company used $50.0 million in proceeds to repay this
mortgage, yielding net proceeds of $24.9 million after closing costs and before
certain post-closing obligations. The Company intends to use the proceeds to
make further reductions in debt and for general corporate purposes. 

"By completing the sale of Paxton Towne Centre, PREIT is improving its balance
sheet by reducing debt, while creating more focus on our core mall portfolio,"
said Joseph F. Coradino, CEO of PREIT. "Market fundamentals have led to
increased demand for high quality power centers, making this an ideal time to
harvest the value created through development, management and leasing of this
property." 

PREIT also has received a non-refundable deposit to sell another non-core power
center, Christiana Center in Newark, Delaware, to an affiliate of the Paxton
Towne Centre buyer. This transaction is expected to close by the end of the
first quarter of 2013. The contract price for the sale of Christiana Center is
$75.0 million. The property currently secures a mortgage loan with an
outstanding balance of $49.9 million as of September 30, 2012. 

The blended capitalization rate on the sale of Paxton Towne Centre and the
scheduled sale of Christiana Center would be approximately 6.7%. 

About Pennsylvania Real Estate Investment Trust

Pennsylvania Real Estate Investment Trust, founded in 1960 and one of the first
equity REITs in the U.S., has a primary investment focus on retail shopping
malls. Currently, the Company's portfolio of 47 properties comprises 37 shopping
malls, seven community and power centers, and three development properties. The
Company`s properties are located in 13 states in the eastern half of the United
States, primarily in the Mid-Atlantic region. The operating retail properties
have approximately 31.9 million total square feet of space. PREIT, headquartered
in Philadelphia, Pennsylvania, is publicly traded on the NYSE under the symbol
PEI. The Company's website can be found at www.preit.com. 

Forward Looking Statements

This press release contains certain "forward-looking statements" within the
meaning of the U.S. Private Securities Litigation Reform Act of 1995, Section
27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act
of 1934. Forward-looking statements relate to expectations, beliefs,
projections, future plans, strategies, anticipated events, trends and other
matters that are not historical facts. These forward-looking statements reflect
our current views about future events, achievements or results and are subject
to risks, uncertainties and changes in circumstances that might cause future
events, achievements or results to differ materially from those expressed or
implied by the forward-looking statements. In particular, our business might be
materially and adversely affected by uncertainties affecting real estate
businesses generally as well as the following, among other factors: our
substantial debt and our high leverage ratio; constraining leverage, interest
and tangible net worth covenants under our 2010 Credit Facility; potential
losses on impairment of certain long-lived assets, such as real estate, or of
intangible assets, such as goodwill; potential losses on impairment of assets
that we might be required to record in connection with any dispositions of
assets; recent changes to our corporate management team and any resulting
modifications to our business strategies; our ability to refinance our existing
indebtedness when it matures, on favorable terms or at all, due in part to the
effects on us of dislocations and liquidity disruptions in the capital and
credit markets; our ability to raise capital, including through the issuance of
equity or equity-related securities if market conditions are favorable, through
joint ventures or other partnerships, through sales of properties or interests
in properties, or through other actions; our short- and long-term liquidity
position; current economic conditions and their effect on employment, consumer
confidence and spending and the corresponding effects on tenant business
performance, prospects, solvency and leasing decisions and on our cash flows,
and the value and potential impairment of our properties; general economic,
financial and political conditions, including credit market conditions, changes
in interest rates or unemployment; changes in the retail industry, including
consolidation and store closings, particularly among anchor tenants; our ability
to maintain and increase property occupancy, sales and rental rates, in light of
the relatively high number of leases that have expired or are expiring in the
next two years; increases in operating costs that cannot be passed on to
tenants; risks relating to development and redevelopment activities; the effects
of online shopping and other uses of technology on our retail tenants;
concentration of our properties in the Mid-Atlantic region; changes in local
market conditions, such as the supply of or demand for retail space, or other
competitive factors; potential dilution from any capital raising transactions;
possible environmental liabilities; our ability to obtain insurance at a
reasonable cost; and existence of complex regulations, including those relating
to our status as a REIT, and the adverse consequences if we were to fail to
qualify as a REIT. Additional factors that might cause future events,
achievements or results to differ materially from those expressed or implied by
our forward-looking statements include those discussed in the section of our
Annual Report on Form 10-K in the section entitled "Item 1A. Risk Factors" and
in our Quarterly Reports on Form 10-Q. We do not intend to update or revise any
forward-looking statements to reflect new information, future events or
otherwise. 



Pennsylvania Real Estate Investment Trust
Robert McCadden, EVP & CFO
215-875-0735
OR
Heather Crowell, VP, Corporate Communications and Investor Relations
215-875-0735 



Copyright Business Wire 2013

Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.